( c) Money as Material Representative of Wealth. (Accumula tion of money. But first we have still to consider money as the general material of contracts, etc.)
It is implicit in the nature of the circuit that each point in it appears simultaneously as point of departure and termination, and that, indeed, it appears as the one to the extent that it appears as the other. The form M—C—C—M is therefore quite as correct as the other, which appears to be the original one, C—M—M—C. The difficulty is that the second commodity is qualitatively different, while this is not true of the second money. It can only be quantitatively different.
When money is considered as a measure, its material substance is essential, although its availability and especially its quantity, the number of the portions of gold or silver which serves as unit, is completely immaterial for it in this determination in which it is used merely as an imaginary, non-existent unit. It is as a unit that it must be available in this determination, not as a number. If I say that 1 lb. of cotton is worth 8d., I am saying that 1 lb. of cotton = Vii6 ounce of gold (the ounce at £3 17s. 7d. or 931d.). This equation then also expresses its determinateness as exchange value, as the equivalent of all other commodities which contain so-and-so many times the ounce of gold, since they are all likewise compared with [1-42] the ounce of gold. This initial ratio of a pound of cotton to gold, which defines the quantity of gold that is contained in a pound of cotton, is given by the quantity of labour time realised in both, the real common substance of exchange values. This to be assumed from the chapter that deals with exchange value as such.[57]
The difficulty of finding this equation is not as great as it appears. For example: in terms of the labour that directly produces gold, a particular quantity of gold appears directly as the product of, say, a day's labour. Directly or indirectly, competition equates the other labour days with this, modificandis modificatis. In a word, in the direct production of gold a particular quantity of gold appears directly as product and therefore as the value, the equivalent, of a particular labour time. Hence, one only has to determine the labour time that is realised in the various commodities, and relate it with the labour time that directly produces gold, to be able to say how much gold is contained in a particular commodity.
The determination of all commodities as prices — as measured exchange values — is a process that takes place only gradually, and presupposes extensive exchange and hence repeated comparison of commodities as exchange values. But once the existence of commodities as prices has become an assumption — an assumption that is itself a product of the social process, a result of the social process of production — the determination of new prices seems simple, for the elements of the production costs themselves already exist in the form of prices and thus have simply to be added together. (FREQUENT ALIENATION, SALE, FREQUENT SALE (Steuart(1)). Moreover, all this must have continuity, in order that prices may acquire a certain regularity.)
However, the point we wanted to come to is this: in so far as gold is to be established as a unit of measurement, its relation to commodities is determined by BARTER, by direct exchange, just like the relationship of all other commodities to one another. In BARTER, however, exchange value is only the product in itself, the first form in which exchange value appears; but the product is not yet posited as exchange value. Firstly, this determination [as exchange value] does not yet dominate production as a whole, but concerns only its surplus and is therefore itself more or less superfluous (like exchange itself); a fortuitous enlargement of the circle of satisfactions, of pleasures (relation to new objects). Consequently, it [exchange] takes place at only a few points (originally, at the borders of naturally evolved communities, in their contact with foreigners), is confined to a narrow area, something passing production by, incidental to it, ends as fortuitously as it comes into existence. Barter in which the surplus of one's own production is casually exchanged for that of the foreigner is only the first occurrence of the product as exchange value in general and is determined by accidental needs, desires, etc. But if it continues, if it becomes a continual act that contains in itself the means for its constant renewal, then — outwardly equally fortuitously — the regulation of reciprocal exchange through the regulation of reciprocal production gradually sets in, and the production costs, which in the final analysis are all reducible to labour time, would thus become the measure of exchange. This shows us how exchange and the exchange value of commodities evolve.
The circumstances in which a relationship is first encountered, however, never show us this relationship either in its purity or in its totality. A product posited as exchange value is essentially no longer determined as a simple product. It is posited in a form distinct from its natural qualities. It is posited as a relationship, a general relationship, not to one commodity but to every commodity, to every possible product. It therefore expresses a general relationship, the product that relates itself to itself as the realisation of a definite quantity of general labour, of social labour time, and to that extent it is equivalent to every other product in the ratio expressed in its exchange value. Exchange value presupposes social labour as the substance of all products, quite apart from their natural characteristics. Nothing can express a relationship unless it relates itself to a particular thing; and nothing can express a general relationship unless it relates itself to something general. Since labour is movement, time is its natural measure. BARTER in its crudest form presupposes labour as the substance and labour time as the measure of commodities; and this becomes evident as soon as barter becomes regularised, continuous, and if it is to contain in itself the reciprocal conditions for its renewal.
The commodity is exchange value only in so far as it is expressed in something else, in other words, as a ratio. A bushel of wheat is worth so many bushels of rye; in this case, the wheat is exchange value in so far as it is expressed in rye, and rye is exchange value in so far as it is expressed in wheat. If either of these two products is related only to itself, it is not exchange value. Now, to the extent to which money appears as measure, it is itself expressed not as a ratio, not as exchange value, but as a natural quantity of a certain material, a natural part by weight of gold or silver. In general, the commodity in which the exchange value of another is expressed, is never expressed as exchange value, never as a ratio, but as a particular quantity in its natural state. If 1 bushel of wheat is worth 3 bushels of rye, only the bushel of wheat is expressed as value, not the bushel of rye. Admittedly, the other is posited in itself as well; 1 bushel of rye then=1/3 bushel of wheat; but this is not [1-43] posited, it is only a second ratio that is indeed directly implicit in the first. When one commodity is expressed in another, the first is treated as a ratio, and the second as a simple quantity of a particular material. 3 bushels of rye are in themselves not a value, but the rye occupying a definite amount of space, as measured by a standard of volume.
The same is true of money as a measure, as the unit in which the exchange values of the other commodities are measured. It is a certain weight of the natural substance in which it is represented, gold, silver, etc. If 1 bushel of wheat is priced at 77s. 7d., it is expressed as another thing to which it is equal, as 1 ounce of gold, as a ratio, as exchange value. But 1 ounce of gold in itself is not exchange value; is not expressed as exchange value, but as a definite quantity of itself, of its natural substance, of gold. If 1 bushel of wheat is priced at 77s. 7d. or 1 ounce of gold, this may represent a greater or smaller value, for 1 ounce of gold will rise or fall in value in proportion to the quantity of labour required for its production. But this is immaterial for its pricing as such, since its price of 77s. 7d. expresses exactly the ratio in which it is an equivalent for all other commodities, can buy them. The particular level of price, whether 77s. or 1,780s. the quarter, falls outside pricing in general, i.e. outside the positing of wheat as price. It has a price, whether it costs 100s. or Is. The price of wheat merely expresses its exchange value in a unit common to all commodities, and therefore assumes that this exchange value is already settled by other relations.
Gold and wheat bear no relationship whatever to each other as natural objects; as such, they do not measure one another, are indifferent to one another. That 1 quarter of wheat has the price of 1 ounce of gold is established, because the ounce of gold in its turn is considered in relation to the labour time necessary for its production. Both wheat and gold are therefore considered in relation to a third thing, labour, and are equated in this ratio. The two are therefore compared with one another as exchange values. But this only shows us how the price of wheat is found, the quantity of gold with which it is equated. In this relationship itself, where money appears as the price of wheat, money itself is not posited as a ratio, as exchange value, but as a definite quantity of a natural material.
In exchange value, commodities (products) are posited as ratios of their social substance, of labour; but as prices they are expressed in quantities of other products in their natural properties. To be sure, it may be said that the price of money is also posited as 1 quarter of wheat, 3 quarters of rye, and all the other quantities of different commodities whose price is 1 ounce of gold. But then, in order to express the price of money, the whole range of commodities would have to be enumerated, each in the quantity in which it is equal to 1 ounce of gold. Hence money would have as many prices as there are commodities whose price it itself expresses. The chief characteristic of price, uniformi-ty, would be missing. No commodity would express the price of money because none would express its relationship to all other commodities, its general exchange value. But the specific feature of price is to express exchange value itself in its generality and yet in a particular commodity. But even that is immaterial. In so far as money appears as the material in which the price of all commodities is expressed, measured, money itself is posited as a definite quantity of gold, silver, etc., in short of its natural material; a simple quantity of a particular material, not itself as exchange value, as ratio. Thus every commodity in which another is expressed as price, is not itself posited as exchange value but as a simple quantity of itself.
In the determination of money as the unit of exchange values, as their measure, their general basis of comparison, the natural material of money — gold, silver — appears esssential, since as the price of the commodity it is not exchange value, not a ratio, but a definite weight of gold or silver, e.g. one pound, with its subdivisions; and thus money does indeed appear originally as a pound, aes grave* It is precisely this which distinguishes price from exchange value, and we have seen that exchange value necessarily leads to pricing. Hence the folly of those who wish to make labour time as such into money, i.e. to posit and not to posit the distinction between price and exchange value.
Money as measure, as element of pricing, as the unit of measurement of exchange values, therefore displays the phenomenon (1) that it is only necessary as a notional unit, once the exchange value of an ounce of gold has been determined for any one commodity; that its actual presence and hence even more the quantity in which it is present is superfluous; the AMOUNT in which it exists in a country is irrelevant to its role as an indicator (INDICATOR of value); it is necessary only as a unit of reckoning; (2) that while it need be posited only notionally, and is in fact only notionally attached to the commodity as its price, it simultaneously provides the basis of comparison, the unit, the measure, as a simple quantity of the natural substance in which it represents itself, a definite weight of gold, silver, etc., adopted as unit. Exchange values (commodities) are conceptually transformed into certain units of weight of gold or silver, and posited in thought as equal to, as expressing, this imagined quantity of gold, etc.
[1-44] If we now consider money in its second determination, as means of exchange and réaliser of prices, we have found that it must be present in a definite quantity; that a particular amount of the weight of gold or silver posited as the unit is necessary to fulfil this role adequately. If the sum of prices to be realised is given, on the one hand, this depending upon the price of a particular commodity multiplied by its quantity, and the velocity of money circulation, on the other, then a certain quantity of means of circulation is required. But if we now consider more closely the original form, the immediate form in which circulation is represented, C—M—M—C, money appears in it purely as a means of exchange. The commodity is exchanged for a commodity, and money appears merely as the means of this exchange. The price of the first commodity is realised in money, in order to realise with that money the price of the second commodity, and thus to obtain it in exchange for the first. After the price of the first commodity is realised, the person who has now obtained its price in money does not aim to receive the price of the second commodity. Rather, he pays its price to obtain the commodity. Basically, money has therefore served him only for the purpose of exchanging the first commodity for the second. As mere means of circulation, money has no other function. The man who has sold his commodity for money wishes to buy another commodity, and the person from whom he has bought uses the money to buy another commodity, etc.
In this determination of pure means of circulation, the function of money itself exists only in this circular movement which it effects by the fact that its quantity, its amount, is determined in advance. How many times it is itself contained in the commodities as a unit is determined in advance in their prices, and as the instrument of circulation it appears simply as the number of this presupposed unit. In so far as it realises the price of the commodities, the commodity is exchanged for its real equivalent in gold and silver; its exchange value is actually expressed in money as another commodity. But in so far as this process takes place merely to reconvert money into commodity, in other words, to exchange the first commodity for the second, money appears only fleetingly, and its substance consists only in its continual appearance in this fleeting form, as this bearer of mediation. Money as a means of circulation is only a means of circulation. To be able to serve in this role, its one essential attribute is that of the quantity (amount) in which it circulates. (Since the amount is determined also by the velocity of circulation, this requires no special mention at this point.) In so far as it realises price, its material existence as gold and silver is essential; but in so far as this realisation is merely fleeting and is to be transcended, it is of no consequence. It is a mere semblance, as if it were [only] a question of exchanging the commodity for gold or silver as a particular commodity: a semblance that vanishes, since the process is completed as soon as the gold and silver are exchanged once more for a commodity, and thereby commodity is exchanged for commodity. Gold and silver as mere means of circulation, or the means of circulation as gold and silver, are therefore indifferent to their qualities as particular natural commodities.
Assume that the total price of the commodities in circulation is 10,000 thaler. Their measure is then 1 thaler=x weight of silver. Now suppose that 100 thaler are needed to circulate these commodities in 6 hours, i.e. each thaler pays the price of 100 thaler in 6 hours. What is now essential is that 100 thaler, the amount 100 of the metallic unit, is available, which measures the total sum of commodity prices, 100 such units. That these units consist of silver is irrelevant to the process itself. This is already evident from the fact that 1 thaler in the cycle of circulation represents a quantity of silver 100 times greater than is really contained in it, although it represents only the weight of silver of 1 thaler in each particular act of exchange.
Taking the whole circulation, therefore, 1 thaler represents 100 thaler, a weight of silver 100 times greater than it actually contains. In fact, it is merely a symbol of the weight of silver contained in the 100 thaler. It realises a price 100 times that which it actually realises considered as a quantity of silver.
Suppose that the £ sterling e.g. = [1]/3 ounce of gold (in fact, it is worth less). In so far as the price of a commodity of £1 is paid, i.e. its price of £1 is realised, the commodity being exchanged for £1, it is crucial that the £ sterling should actually contain Vs ounce of gold. If it were a counterfeit £ sterling, consisting of a base metal, a £ sterling only in appearance, the price of the commodity would not in fact be realised. For the price to be realised, it would have to be paid in as much base metal as='/3 ounce of gold.
Considered in the context of this isolated aspect of circulation, it is accordingly essential that the money unit should actually represent a definite quantity of gold and silver. But it is a different matter if we consider the whole of circulation, circulation as a process in which the circle completes itself: C—M—M—C. In the first case, the realisation of the price would be merely a semblance: only part of the price would be realised. The price notionally attached to the commodity would not be obtained in reality. The commodity notionally taken as=so many units by weight of gold would not in actual exchange bring in this number of units by weight of gold. Yet if a counterfeit £ sterling took the place of a genuine one in circulation, it would perform in the whole circulation absolutely the same service as if it were genuine. If commodity a at a price of £1 is exchanged for a counterfeit pound, and this counterfeit pound is further exchanged for commodity b priced at £1 sterling, the counterfeit pound has performed absolutely the same service as if it [1-45] were a genuine £ sterling.
Hence in this process the real pound sterling is in fact merely a symbol, in so far as we are considering not the aspect in terms of which it realises the prices, but the whole of the process in which the pound sterling serves only as the means of circulation, and in which the realisation of prices is merely a semblance, a fleeting mediation. Here the pound [sterling] of gold serves merely to exchange commodity a for commodity b which has the same price. The actual realisation of the price of commodity a is here commodity b, and that of the price [of] b is the commodity a or c or d, which is the same thing so far as the form of the relationship is concerned, since the particular content of the commodity is quite immaterial for it. Commodities of equal price are exchanged. Instead of commodity a directly exchanging for commodity b, the price of commodity a is exchanged with commodity b, and the price of commodity b with commodity a.
Money accordingly represents in respect of the commodity only its price. Commodities are exchanged for one another at their price. The price of the commodity itself is the notional expression attached to it that it [the commodity] is the amount of a certain natural unit (unit of weight) of gold or silver, the material in which money is embodied. In money, or the realised price of the commodity, an actual number of this unit now confronts it. But in so far as the realisation of price is not the end, and we are not concerned to obtain the price of the commodity as price but as the price of another commodity, the material of which money is composed, e.g. gold or silver, is of no consequence. Money becomes the subject as instrument of circulation, as means of exchange, and the natural material in which it is represented appears as an ACCIDENT, whose significance vanishes in the act of exchange itself, because it is not in this material that the commodity exchanged for money is eventually to be realised, but in the material of the other commodity.
For in addition to the fact that in circulation money (1) realises prices; (2) circulates titles of ownership, we now also have the fact that (3) by means of circulation something happens which could not happen directly, namely, that the exchange value of the commodity is expressed in every other commodity. If 1 yard of linen costs 2 s., and 1 lb. of sugar costs 1 s., the yard of linen is realised in 2 lbs of sugar by means of the 2 s., and the sugar is therefore converted into the material of the linen's exchange value, into the material in which the linen's exchange value is realised.
As a mere means of circulation, in its determination in the process of circulation as a continuous flow, money is neither a measure of prices, for it is already posited as such in the prices themselves, nor is it a means for the realisation of prices, for as such it exists only in the one phase of circulation but vanishes in the totality of all its phases. It is rather the mere representative of price in relation to all commodities, and serves only as the means by which commodities are exchanged at equal prices. Money is exchanged for the one commodity because it is the general representative of its exchange value and as such the representative of every other commodity of the same exchange value, the general representative, and as such it is in circulation itself. It represents the price of the one commodity relative to all other commodities, or the price of all commodities relative to one commodity. In this respect it is not only the representative of commodity prices but symbol of itself, i.e. in the act of circulation itself, its material, gold and silver, is of no consequence.
It is price; it is a definite quantity of gold or silver. But in so far as the reality of price is here merely a fleeting one, destined constantly to disappear, to be transcended, not to be accepted as a definitive realisation but always only as an intermediate, mediating one; in so far as the purpose here is not the realisation of price at all, but the realisation of the exchange value of a particular commodity in the material of another commodity, the material of money itself is of no consequence, it disappears as the realisation of price, since the realisation itself vanishes. In so far as money is in this continuous movement, it is so only as the representative of exchange value, which becomes actual only by real exchange value continually taking the place of its representative, continually changing places with it, being continually exchanged for it.
In this process, therefore, its reality is not that it is price but that it represents price, that it is its representative. It is the objectively present representative of price, therefore of itself, and as such of the exchange value of commodities. As means of exchange it realises commodity prices only in order to posit the exchange value of one commodity in another as its unit, in order to realise its exchange value in the other commodity, i.e. to posit the other commodity as the material of its exchange value.
As such an objective symbol, therefore, money appears only in circulation. Withdrawn from circulation it becomes realised price again; but within the process, as we have seen, the quantity, the number of these objective symbols of the monetary unit is essentially determined. Hence, while in circulation, in which money appears as objectively confronting commodities, its material substance, its basis as a definite quantity of gold or silver, is without significance, its amount, on the contrary, is essentially determined since it is merely a symbol for a definite number of these units. In its determination as measure, in which it was introduced only notionally, its material basis was of essential significance but its quantity and its existence in general were of no consequence. From this it follows that money as gold and silver, in so far as it serves merely as means of circulation, means of exchange, can be replaced by any other symbol [1-46] that expresses a definite quantity of its unit. Hence symbolic money can replace real money because material money as mere means of exchange is itself symbolic.
These contradictory determinations of money as measure, as réaliser of prices and as mere means of exchange, explain the otherwise inexplicable phenomenon that if metallic money, gold, silver, is debased by the admixture of a base metal, the money is depreciated and prices rise. This occurs because in this case the measure of prices is no longer the cost of production of, say, 1 ounce of gold but of the ounce [of the alloy], [2]/[3] of which is copper, etc. (Debasements of the coinage, which consist merely in falsifying or altering the names of the fractional weight units of the precious metals, by calling e.g. the eighth part of an ounce 1 sovereign, leave the standard absolutely the same and alter only its name. If i/[4] of an ounce was previously called 1 sovereign, and it is now [1]/[8] of an ounce, the price of 1 sovereign now expresses only
[1]/s of an ounce of gold; hence ABOUT 2 sovereigns are necessary to express the same price as was earlier expressed by one.) In other words, if only a falsification of the name of the fractional parts of the precious metals has occurred, the standard remains the same, but the fractional part is expressed in twice as many francs, etc., as before. On the other hand, if the basis of money — gold or silver — is entirely abolished and replaced with paper bearing the symbol of a definite amount of real money, in the quantity required by circulation, the paper circulates as currency at the full value of the gold and silver. In the first case, [the rise in prices occurs] because the means of circulation is simultaneously the material of money as a measure and the material in which price is definitively realised. In the second case, [no rise in prices occurs] because money is functioning only in its determination as means of circulation.
Example of clumsy confusion of the contradictory functions of money:
" P R I C E IS EXACTLY DETERMINED BY T H E QUANTITY O F MONEY THERE IS T O BUY I T WITH. A L I . T H E COMMODITIES IN I HE WORLD CAN FETCH NO MORE T H A N ALL T H E MONEY IN T H E WORLD."
Firstly, pricing has nothing to do with actual sale; in it, money only [serves] as measure. Secondly, all the commodities present in circulation could FETCH a thousand times more MONEY than there is in the WORLD, if each PIECE of money circulated a thousand times (passage from the London Weekly Dispatch, 8 November [1857]).
Since the total sum of prices that are to be realised in circulation changes with the price of commodities and the volume in which they are put into circulation; since on the other hand the velocity of the means of circulation present in each case is determined by circumstances which are independent of it, the quantity of the means of circulation must be able to change, to be enlarged and contracted—contraction and expansion of circulation.
It can be said of money as mere means of circulation that it ceases to be a commodity (a particular commodity) in that its material is of no consequence, and it now only satisfies the requirements of [the act of] exchange itself, no longer any other immediate requirements. Gold and silver cease to be commodities as soon as they circulate as money. On the other hand, it can be said of money that it is just commodity (general commodity), commodity in its pure form, indifferent to its particular natural properties and hence to all immediate requirements, without natural relationship to a particular need as such. The adherents of the monetary system,[38] even some of those who adhere to the system of protection (see e.g. F. L. A. Ferrier, p. 259) have clung to the first aspect, and the modern economists to the second; e.g. Say, who says that money is a "particular" commodity, treats it as a commodity like any other.a
As means of exchange, money appears as the necessary mediator between production and consumption. In a system of
a J. B. Sav, Traité d'économie politique, 3rd ed., Vol. II, Paris, 1817, pp. 460-61.—Erf.
developed money relationships, one produces only in order to exchange, or one produces only by exchanging. Hence, if money were abolished, one would either be thrown back to a lower level of production (to which corresponds barter playing a marginal role in production), or one would progress to a higher level, where exchange value would no longer be the primary attribute of the commodity, because general labour, whose representative it is, would no longer appear only as socially mediated private labour. The question whether money as means of circulation is productive or not is answered just as readily. According to Adam Smith, money is unproductive.[3] Yet Ferrier says e.g.:
"It creates valeurs,h since they would not exist without it" [F. L. A. Ferrier, Du gouvernement considéré dans ses rapports avec le commerce, Paris, 1805, p. 52]. One must not only "consider its value as metal, but just as much its quality as money" [op. cit., p. 18].
A. Smith is right in so far as money is not the instrument of some particular branch of production; Ferrier is right, [1-47] since it is inherent in general production based on exchange value to posit product and agent of production in the determination of money, and this implies a money distinct from the product; because the money relationship is itself a relationship of production, if production is considered in its totality.
In so far as C—M—M—C is divided up into its two moments, although the prices of the commodities are implied (and this makes all the difference), circulation is divided up into two acts of direct barter. C—M: the exchange value of the commodity is expressed in another particular commodity, the material of money, as also that of money in the commodity; equally in M—C. To that extent, A. Smith is correct in saying that money as means of exchange is only a more complicated kind of BARTER.0 But when the whole of the process is considered, not the two phases as independent acts, so that the commodity is realised in money and money is realised in the commodity, the opponents of A. Smith are correct in their contention that he misunderstood the nature of money and that money circulation supplants BARTER; since money merely serves to balance the "ARITHMETICAL DIVISION" which arises from the division of labour. These "ARITHMETICAL FIGURES" need no more be of gold or silver than measures of length (see Solly,
a A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. II, London, 1836, pp. 271-85; Vol. Ill , London, 1839, pp. 70-106.— Ed.
b Values.— Ed. c A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter IV.— Ed.
7-852 [The Present Distress, in relation to the Theory of Money, London, 1830, pp. 5-6,] p. 20).
Commodities from being marchandises become denrées, pass into consumption. Money as a means of circulation does not. So long as it retains its role of means of circulation, it does not cease at any point to be a commodity.
We pass now to the third determination of money, which results directly from the second form of circulation: M—C—C—M. Here money appears not only as a means, nor as a measure, but as an end in itself, and hence leaves circulation, in the same way as the particular commodity which completes its circuit, and which has changed from marchandise to denrée.
First still to be noted that, given the determination of money as an immanent relation of general production based upon exchange value, its service as an instrument of production can now also be demonstrated in detail.
"The advantage of gold and silver stems from the fact that it replaces labour" (Lauderdale, [Recherches sur la nature et l'origine de la richesse publique, Paris, 1808, p. 140,] p. 11[60]).
Without money a large number of trocs(2) is necessary to obtain in exchange the object one desires. Further, [without money,] it would be necessary to ascertain the relative value of the commodities in each particular exchange. The former necessity is obviated by money as instrument of exchange (instrument of trade); the latter, by money as measure of value and representative of all commodities (idem, [pp. 142, 140 and 144,] I.e.).
The opposite assertion, that money is not productive,(3) amounts only to saying that it is unproductive outside the role in which it is productive as measure, instrument of circulation and representative of values, that its quantity is productive only in so far as it is required to fulfil these determinations. It is true to say that money becomes not merely unproductive but faux frais de production(4) as soon as more of it is employed than is necessary for its productive role. But this is equally true of every other instrument of production or exchange, of machinery as much as of means of transport. But if by this is meant that money merely exchanges already existing real wealth, then this is wrong, for money likewise exchanges and purchases labour, productive activity itself, potential wealth.
The third determination of money in its complete development presupposes the first two determinations and constitutes their unity. Money, then, has an independent existence outside circulation; it has stepped outside it. As a particular commodity, it can be converted from its form as money into that of objects of luxury, gold and silver ornaments (so long as the artistic labour involved is still very simple, e.g. as in the earlier periods of English history, silver money was continually converted into PLATE and vice versa. See Taylor(5)). Or it can be accumulated as money and so constitute a hoarded treasure. So far as money in its independent existence derives from circulation, it appears in circulation itself as the result of circulation; it closes its own circle by means of circulation. In this aspect, its role as capital is already latent. It is negated as mere means of exchange. Nevertheless, since historically it can be posited as measure before it appears as means of exchange, and can conversely appear as means of exchange before it is posited as measure — in the latter case it would exist only as a preferred commodity(6)—it can also appear historically in its third determination before it has been posited in the two previous ones. But gold and silver can be accumulated as money only if they are already present in one of the two previous determinations, and in its third determination it can appear in a developed form only if it has already been developed in the earlier two. Otherwise, its accumulation is merely accumulation of gold and silver, not of money.
[1-48] (Mention as a particularly interesting example of this the accumulation of copper money in the earlier period of the Roman Republic.)
In so far as money as the universal material representative of wealth derives from circulation and as such is itself a product of circulation, which is simultaneously exchange to a higher degree and a special form of exchange, money is also in this third determination related to circulation. It is independent of circulation, but this independence is only circulation's own process. In the same measure as it leaves circulation, it re-enters it. Devoid of all relation to circulation, money would not be money but a simple natural object, gold or silver. In this determination money is as much the premiss as the result of circulation. Its very independence is not a cessation of the relation to circulation, but a negative relation to it. This is inherent in the independence of money as a result of M — C — C — M. Money as capital implies: (1) that money is as much a premiss of circulation as its result; (2) that its independence is therefore only a negative relation to circulation, but always a relation to it; (3) that it is itself posited as instrument of production in that circulation no longer appears in its initial simplicity, as quantitative exchange, but as process of production, as the real exchange of matter. And so money itself is determined as a particular moment of this production process. Production is concerned not merely with simple pricing, i.e. with translating the exchange value of commodities into a common unit, but with the creation of exchange values, hence with the creation of what determines prices as well, with the creation not merely of their form, but of their content. Hence, if in simple circulation money appears in general as productive, namely in so far as circulation in general is itself a moment of the system of production, as yet it has this determination only for us; it has not yet been posited in money. (4) Consequently, as capital, money is also posited as relating to itself by means of circulation — the relation of interest and capital. But here we are not yet concerned with this. We have simply to consider here how money in its third determination has emerged as something independent from circulation, or, more precisely, from its two earlier determinations.
("An increase of money [is] merely an increase in the means of reckoning" (Sismondi [Etudes sur l'économie politique.. Vol. II, Brussels, 1838, p. 278]).
This is correct only in so far as money functions as mere means of exchange. In its other role its increase is also an increase in the means of payment.)
"Trade has detached the shadow from the body, and introduced the possibility of possessing them separately" (Sismondi [op. cit., p. 300]).
Thus money is now exchange value become independent (as such it always appears as means of exchange only ephemerally) in its general form. True, it possesses its own materiality or substance, gold and silver, and it is just this which gives it its independence, for what only exists as an aspect of something else, as a determination or relation of other things, is not independent. On the other hand, in this material independence as gold and silver, it represents not only the exchange value of one commodity relative to the other but exchange value relative to all commodities; and while it itself possesses a substance, it simultaneously appears in its particular existence as gold and silver as the general exchange value of the other commodities. On the one hand it is possessed as their exchange value; on the other they exist as just so many particular substances of the latter, so that it can be converted into each of these substances by means of exchange just as much as it is indifferent to and raised above their determinateness and particularity. They are thus merely fortuitous existences. It is the "précis de toutes les choses"," in which their particular character is wiped out; general wealth as concise compendium as against its spread and fragmentation in the world of commodities. While wealth appears in particular commodities as a feature of them, or they appear as a particular element of wealth, general wealth itself appears in gold and silver as concentrated in a particular material. Every particular commodity, in so far as it is exchange value and has a price, itself expresses only a definite quantity of money in an incomplete form. For it must first be thrown into circulation to be realised, and because of its particularity, its realisation remains fortuitous. But in so far as the commodity is not posited as price, but in its natural quality, it is a moment of wealth only through its relation to a particular need which it satisfies, and expresses in this respect (1) only the wealth of use, (2) only one very special aspect of this wealth. Money, on the contrary, apart from its particular usefulness as a valuable commodity, is (1) realised price; (2) satisfies every need, in that it can be exchanged for the object of every need [and is] quite indifferent to every particularity. The commodity possesses this property only through the mediation of money. Money possesses it directly in relation to all commodities, therefore in relation to the whole world of wealth, to wealth as such. In money, general wealth is not only a form but at the same time the content itself. The concept of wealth is so to speak realised in a particular object, individualised. In the particular commodity, [II-1]b so far as it is price, wealth is present only notionally, in a form which has not yet been realised; so far as it has a definite use value, it exhibits only one quite isolated aspect of it. In money, on the other hand, the price is realised, and the substance of money is wealth itself, both in its abstraction from its particular modes of existence and in its totality.
Exchange value constitutes the substance of money, and exchange value is wealth. In another way, therefore, money is also the embodiment of wealth, as against all the particular substances of which wealth is composed. If, therefore, on the one hand, the form and content of wealth are identical in money considered in itself, on the other hand, money is, in contrast to all other commodities, the general form of wealth in relation to them, while the totality of these particularities constitutes its substance. If money in the first determination is wealth itself, in the second determination it is its general material representative. In money itself this totality exists as the imagined quintessence of all commodities. Wealth (exchange value as totality and also as abstraction) therefore exists, to the exclusion of all other commodities, individualised as such, as a particular tangible object, only in gold and silver. Money is therefore the god among commodities.
As an isolated tangible object, money can thus be fortuitously sought, found, stolen, discovered, and general wealth can be tangibly brought into the possession of the individual. From its state of servitude, in which it appears as mere means of circulation, money suddenly becomes the ruler and god in the world of commodities. It represents the celestial existence of commodities, while they represent its earthly existence. Every form of natural wealth, before it is replaced by exchange value, implies an essential relationship of the individual to the object, so that one side of him becomes objectified in the thing and his possession of the thing also appears as a particular development of his individuality: wealth in sheep as the development of the individual as shepherd, wealth in corn as his development as farmer, etc. Money, on the contrary, as the individuality of general wealth, itself emerging from circulation and merely representing the general, as mere social result, implies no individual relation at all to its owner. Its possession is not the development of any one of the essential aspects of his individuality, but rather possession of something devoid of individuality, for this social [relationship] exists at the same time as a tangible, external object, of which possession can be taken mechanically and which can similarly be lost.
Its relationship to the individual appears therefore as a purely fortuitous one; while this relationship to a thing quite unconnected with his individuality gives him at the same time, because of the thing's character, general domination over society, over the whole world of enjoyment, labour, etc. It is the same as if e.g. my discovery of a stone, quite independent of my individuality, were to procure me mastery over all fields of learning. The possession of money relates me to (social) wealth in very much the same way as that in which the philosopher's stone would relate me to all fields of learning.
Money is therefore not only an object of the quest for enrichment, it is the object of it. It is essentially auri sacra fames.(7)
The quest for enrichment as such, as a particular form of impulse, i.e. as distinct from the quest for particular wealth, e.g. the quest for clothes, weapons, jewellery, women, wine, etc., becomes possible only when general wealth, wealth as such, has been individualised in a particular thing, i.e. when money has assumed its third determination. Money is therefore not only the object but at the same time the source of the quest for enrichment. Avarice is possible without money, but the quest for enrichment is itself the product of a definite social development, not a natural, in contrast to an historical, development. This explains the lamentations of the ancients about money as the source of all evil. The quest for pleasure in its general form and avarice are two particular forms of greed for money. The abstract quest for pleasure implies an object that can embody the possibility of all pleasures. The abstract quest for pleasure is realised by money in the determination in which it is the material representative of wealth; avarice is realised in so far as money is merely the general form of wealth as against commodities as its particular substances. To hoard money as such, the individual must sacrifice all relation to the objects that satisfy particular needs, he must abstain, in order to satisfy his need or greed for money as such. The greed for money or quest for enrichment is necessarily the downfall of the ancient communities. Hence the opposition to it. It itself is the community, and cannot tolerate any other standing above it. But this implies the full development of exchange value, hence of a social organisation corresponding to it.
In antiquity, exchange value was not the nexus rerum[62]; it appears as such only among the trading nations, but they had only a CARRYING TRADE and did not themselves produce. At least production was secondary among the Phoenicians, Carthaginians, etc. They could live in the interstices of the ancient world, like the Jews in Poland or in the Middle Ages. Rather, the ancient world was itself the precondition for the existence of such trading peoples. That is why they were ruined every time they came into serious conflict with the communities of antiquity.
Among the Romans, Greeks, etc., money appears at first ingenuously in its two initial determinations as measure and means of circulation, in neither in very developed forms. But as soon as their trade, etc., developed or, as with the Romans, conquest supplied money to them [II-2] in abundance — then, suddenly at a certain stage of their economic development, money necessarily appears in its third determination and, the more its development in that form proceeds, the more it appears as the downfall of their community. To act productively, money in its third determination must be, as we have seen, not merely the premiss but just as much the result of circulation. And as the premiss of circulation, it must be itself a moment of circulation, something posited by it. In the case of the Romans, for instance, where money was accumulated by the plunder of the whole world, this was not the case.
It is inherent in the very nature of money itself that it can exist as a developed element of production only where wage labour exists, and hence far from dissolving the social order, it is indeed a condition for its development and a driving force for the development of all productive forces, material and spiritual. Today an individual person can still acquire money fortuitously, and its possession can therefore have just as destructive an effect on him as it had on the ancient communities. But the very destruction of this individual in modern society is only the enrichment of the productive part of society. The owner of money in the ancient sense is destroyed by the industrial process which he serves willy-nilly. The destruction concerns only his person. As material representative of general wealth, as individualised exchange value, money must be the immediate object, aim and product of general labour, of the labour of all individuals. Labour must directly produce exchange value, i.e. money. It must therefore be wage labour.
The quest for enrichment, being the driving force of everyone, since everyone wishes to produce money, produces general wealth. Only thus can the general quest for enrichment become the source of general wealth, wealth which continually reproduces itself anew. In that labour is wage labour and its immediate purpose is money, general wealth is posited as its purpose and object. (In this context the connection with the transformation of the ancient military system into a mercenary one to be discussed.) Here, money as an end becomes the means to general industriousness. General wealth is produced in order to seize hold of its representative. In this way, the real sources of wealth are opened up.
Since the aim of labour is not a particular product that bears a particular relation to the particular needs of the individual, but money, wealth in its general form, the industriousness of the individual firstly has no limits. It is indifferent to its particularity and assumes any form that serves the aim; it is inventive in the creation of new objects for social need, etc. It is clear, therefore, that with wage labour as its basis, the effect of money is not destructive but productive; while the ancient community by its very nature was in contradiction to wage labour as its general basis. General industry is possible only where all labour produces general wealth, not a particular form of it; where, therefore, the wage of the individual is also money. Otherwise only particular forms of industry are possible. Exchange value as immediate product of labour is money as its immediate product. The immediate labour that produces exchange value as such is therefore wage labour. Where money is not itself the community, it must dissolve the community.
The ancients could purchase labour directly, a slave; but the slave could not buy money with his labour. An increase in money could make slaves dearer, but could not make their labour more productive. Negro slavery—a purely industrial form of slavery which in any case is incompatible with and disappears as a result of the development of bourgeois society—implies wage labour; if other, free, states with wage labour did not exist alongside slavery, but it were isolated, all social conditions in the Negro states would immediately revert to pre-civilised forms.
Money as individualised exchange value and thus as incarnate wealth has been sought in alchemy; so it was determined in the monetary system. The prehistory of the development of modern industrial society opens with a general greed for money, on the part of both individuals and states. The actual development of the sources of wealth proceeds, as it were, behind its back, as a means to get possession of the representative of wealth. Where money does not originate from circulation but is physically discovered— as in Spain — the nation is impoverished, while the nations which have to work to take it away from the Spaniards develop the sources of wealth and really enrich themselves. The discoveries, the finding of gold in new parts of the world, in new countries, play such a great role in the history of the revolution because colonisation is being improvised here, forced in hot-house fashion.[42]
The hunt for gold in all countries leads to their discovery; to the foundation of new states; first of all, to the expansion of the range of commodities which enter into circulation, creating new wants, and drawing remote parts of the world into the process of exchange and interchange of matter. In this respect, money as the general representative of wealth, as individualised exchange value, was therefore also a two-fold means of expanding wealth into universality and extending the dimensions of exchange to cover the whole earth; of first creating the real universality of exchange value in respect to material and space. But it is inherent in the determination of money discussed here that the illusion about its nature, i.e. the preoccupation with one of its determinations in its abstraction and the neglect of the contradictions contained in it, endows money — behind the back of individuals — with this really magical significance. It is in fact by means of this self-contradictory and hence illusory determination, through this abstraction, that money becomes so potent [II-3](8) an instrument in the real development of the forces of social production.
The elementary precondition for bourgeois society is that labour directly produces exchange value, in other words, money; and equally that thereupon money directly buys labour, hence buys the labourer only in so far as he himself sells his activity in exchange. Hence wage labour on the one hand, and capital on the other, are only different forms of developed exchange value and of money as its incarnation. Money is thus directly at once the real community, in so far as it is the general material of existence for all, and also the communal product of all. But, as we have seen, in money the community is also a mere abstraction, a mere external, accidental thing for the individual, and at the same time only a means for his satisfaction as an isolated individual. The community of antiquity implies quite a different relation of the individual in itself. Therefore it is shattered by the development of money in its third determination. Every production is an objectification of the individual. But in money (exchange value) the objectification of the individual is not that of himself in his natural character but that of himself posited in a social determination (relationship), which is at the same time external to him.
Money posited in the form of medium of circulation, is coin. As coin, it has lost its use value; its use value is coincident with its determination as means of circulation. E.g. it must first be melted down to be able to serve as money as such. It must be demonetised. That is why in the form of coin, money is merely a symbol and indifferent to its material. But as coin, money also loses its universal character, taking on a national, local one. It is divided up into coinage of different sorts, according to the material of which it consists, gold, copper, silver, etc. It acquires a political title, and speaks, as it were, a different language in different countries. Finally, in the same country, it acquires different denominations, etc. Money in the third determination as independently emerging from and confronting circulation, therefore, negates also its character as coin. It reappears as gold and silver, whether it is melted down into it, or is only valued according to the number of units by weight of gold or silver it contains. It also loses its national character again and serves as means of exchange between nations, as universal means of exchange; no longer as symbol, however, but as a definite quantity of gold and silver. In the most developed system of international exchange, gold and silver therefore reappear in just the form in which they played a role already in primitive barter. Gold and silver, like exchange itself, as already mentioned, do not initially appear within the sphere of a social community but at the point at which it ends, at its boundaries; at its not very numerous points of contact with foreign communities. Gold and silver now appear posited as the commodity as such, the universal commodity which preserves its character as a commodity at all places. In this determination of its form money is uniformly valid in all places. Only in this way is money the material representative of general wealth. In the mercantile system, gold and silver are therefore regarded as the measure of the power of the various communities.
"As soon as the PRECIOUS METALS become OBJECTS OF COMMERCE, A UNIVERSAL EQUIVALENT FOR EVERYTHING, they also become the MEASURE OF POWER BETWEEN NATIONS. Hence the mercantile system" (Steuart [An Inquiry into the Principles of Political Oeconomy, Vol. I, p. 327]).
However much the modern economists consider themselves to have advanced beyond the mercantile system, in periods of general crises gold and silver figure in precisely this determination, in the year 1857[63] as much as in 1600. In this character, gold and silver [play] an important role in the creation of the world market. Hence the circulation of American silver from West to East; the metallic link between America and Europe, on the one hand, with Asia on the other, since the beginning of the modern epoch. In primitive communities this trade in gold and silver is only incidental, like exchange as a whole, related only to the surplus. But in developed trade, posited as a moment that is essentially connected with the whole of production, etc. Money no longer appears for the exchange of the surplus, but to balance the surplus in the overall process of international commodity exchange. It is now coin only as world coin. But as such it is essentially indifferent to its determination as form of the means of circulation, whereas its material is the all-important thing. As form, in this determination, gold and silver remain the ubiquitous accessible commodity, the commodity as such.
(In this first section,[64] where exchange value, money and price are considered, commodities always appear as already in existence. The determination of form [is] simple. We know that they express characteristics of social production, but the latter itself is their presupposition. But they are not posited in this determination. And so in fact the first exchange appears as an exchange of the surplus, which does not embrace and condition the whole of production. It is the available surplus of a total production which is outside the world of exchange value. Even in a developed society, this surplus still emerges on the surface as the immediately existing world of commodities. Through itself, however, it points beyond itself to economic relationships which are posited as relations of production. The internal structure of production therefore forms the second section; its culmination in the State the third; the international relationship [of production] the fourth; and as the conclusion, the world market, in which production is posited as a totality and all its moments also, but in which simultaneously all contradictions are set in motion. Hence the world market is likewise both the presupposition of the totality and its bearer. Crises are then the general pointer to beyond the presupposition, and the urge to adopt a new historical form.)
" T H E QUANTITY OF GOODS AND THE QUANTITY OF MONEY MAY REMAIN THE SAME, AND PRICES MAY RISE OR FALL NOTWITHSTANDING" (namely through greater EXPENDITURE by e.g. the MONIED CAPITALISTS, landlords, State officials, etc. Malthus, [Principles of Political Economy, 2nd ed., London, 1836, p. 391] X, 43).[65]
[II-4] As we have seen, money in the form in which it independently emerges from circulation and confronts it, is the negation (negative unity) of its determination as means of circulation and measure.*
* In so far as money is the means of circulation, "the quantity of it that circulates" can "never be individually employed, it must always circulate" (Storch [Cours d'économie politique, Vol. II, Paris, 1823, pp. 113-14]). The individual can use money only by divesting himself of it, by positing it as being for others, in its social We have already shown:
Firstly: Money is the negation of the means of circulation as such, of coin. But it at the same time includes it as its determination, negatively, since it can always be converted into coin; positively as world coin. But as such it is indifferent to its form determination, and is essentially commodity as such, ubiquitous commodity, not locally determined. This indifference expresses itself in two ways: one, it is now money only as gold and silver, and not as a symbol nor in the form of coinage. Hence the façon* put on money as coinage by the State has no value; only its metallic content gives value to the coin. Even in internal trade it has only a temporary, local value,
"because it is no more useful to him who possesses it than to him who possesses the commodities to be bought" [Storch, op. cit., p. 175].
The more domestic trade is conditioned on all sides by foreign trade, the more even the value of this façon disappears: it does not exist in private exchange but only appears as a tax. Then, as such a general commodity, as world coin, gold and silver do not have to return to their point of departure, circulation as such is not necessary at all. Example: Asia and Europe. Hence the lamenta-tion of the adherents of the monetary system that money vanishes among the heathens, and does not return (see Misseldenh ABOUT 1600). The more the external circulation is conditioned and comprehended by the domestic circulation, the more world coin as such enters into circulation (rotation). We are not yet concerned here with this higher stage, and it is not part of the simple relationship which we are considering here.
Secondly. Money is the negation of itself as simple realisation of the prices of commodities, where the particular commodity always
determination. This, as Storch correctly observes, is why the material of money "must not be indispensable for the existence of man", as are e.g. hides, salt, etc., which are used as money among many nations. For the quantity of it which is in circulation is lost to consumption. Hence, firstly, metals are generally preferred to other commodities as money, and, secondly, the precious metals to those which are useful as instruments of production. It is characteristic of the economists that Storch formulates it thus: the material of money must "have a direct value but based on a besoin factice [artificial need]". By besoin factice the economist means firstly: the besoins that arise from the social existence of the individual; secondly, those that are not a consequence of his bare existence as a natural object. This illustrates the desperate internal poverty that is the basis of bourgeois wealth and its science.
remains the essential factor. Rather, money becomes price realised in itself, and as such both the material representative of wealth and the general form of wealth, relative to all commodities as merely particular substances of wealth; but
Thirdly: Money is also negated in the determination in which it is merely the measure of exchange values. As the general form of wealth and as its material representative, money is no longer the notional measure of something else, of exchange values. For in its metallic existence it is itself the adequate reality of exchange value. The determination of measure must here be posited in money itself. It is its own unit; and the measure of its own value, its measure as wealth, as exchange value, is the quantity of itself which it represents. The multiple of a quantity of itself which serves as unit. As a measure, its amount was of no consequence; as a means of circulation, its substance, the material of which the unit is composed, was of no consequence; but as money in this third determination its own amount as a definite material quantity is essential. Given its quality as general wealth there is no further distinction in it other than the quantitative one. It represents a greater or lesser amount of general wealth, in the proportion in which a given unit of it is possessed in a greater or lesser number.
If it is general wealth, one is the richer the more of it one possesses, and the sole important process for both the individual and the nations is its accumulation. In accordance with its determination, it here performed the act of stepping out of circulation. Now this withdrawal from circulation and this accumulation of it appear as the essential object of the drive for enrichment and as the essential process of enrichment. In gold and silver I possess general wealth in its pure form, and the more of it I hoard up, the more general wealth I appropriate to myself. If gold and silver represent general wealth, then as certain quantities they represent it only to a certain degree, which is capable of being expanded indefinitely. This accumulation of gold and silver, which takes on the appearance as their repeated withdrawal from circulation, is simultaneously the safeguarding of general wealth against circulation, in which it continually gets lost in exchange for some particular wealth which eventually disappears in consumption.
Among all ancient peoples, the accumulation of gold and silver appears initially as a priestly and royal privilege, since only gods and kings are entitled to the god and king of commodities. Only they are worthy of possessing wealth as such. This accumulation then on the one hand merely for the exhibition of the surplus, i.e.
of wealth as something extraordinary, something only for Sun-days; for gifts to the temple and its gods; for public works of art; finally as a security for cases of extraordinary emergency, for the purchase of arms, etc. Accumulation later becomes a matter of politics among the ancient peoples. The State treasury as reserve fund and the temple are the original banks, in which this holy of holies is preserved. Hoarding and accumulation [attains] its ultimate development in the modern banks, but in this case [II-5] with a more developed determination. On the other hand, with private persons, accumulation as a means of safeguarding wealth in its pure form against the vicissitudes of the external world, the form in which it can be buried, etc., in which, in short, it enters into a very secret relationship to the individual. This still occurs on a great historical scale in Asia. It is repeated in all PANICS, wars, etc., in bourgeois society, which then falls back into the condition of barbarism. Likewise the hoarding up of gold, etc., for ornaments and display among semi-barbaric peoples. But a very great and continually growing part of gold, etc., withdrawn from circulation as luxury objects in the most developed bourgeois society (see Jacob,(9) etc.).
The wealth of individuals is proved precisely by their retaining possession of it as the representative of general wealth, without yielding it up to circulation and employing it for particular needs. And in the same degree as money is developed in its different determinations, i.e. as wealth as such becomes the general yardstick of the worth of individuals, there develops the impulse to exhibit wealth and hence the DISPLAY of gold and silver as representatives of wealth, just as Herr von Rothschild displays as his chosen coat of arms, I believe, two banknotes of £100,000, each in its own frame. The barbaric display of gold, etc., is only a more naive form of this modern exhibition, in that it is less related to gold as money than to gold as something which simply glitters. In the modern display gold makes a reflected point, the point that gold is not being used as money; the antithetical form to circulation is the important thing here.
The accumulation of all other commodities less original than that of gold and silver:
(1) because of their perishability. Metals as such represent durability relative to other commodities. They are also eagerly accumulated because of their greater scarcity and their exceptional character as instruments of production par excellence. The precious metals, as they are not exposed to oxidisation in the atmosphere, etc., are even less perishable than the base metals. What other commodities lose is precisely their form; but it is their form which gives them exchange value, while their use value consists in the destruction of this form, in consumption. With money, on the contrary, its substance, its materiality, is the very form in which it represents wealth. If money appears as the commodity which is general everywhere, with respect to space, it now also becomes general in respect to time. It preserves itself as wealth at all times. It has specific durability. It is the treasure which neither moth nor rust doth corrupt.(10) All commodities are merely perishable money; money is the imperishable commodity. Money is the ubiquitous commodity; the commodity is only local money. But accumulation is essentially a process which goes on in time. On this aspect Petty writes[66]:
"The great and ultimate effect of trade is not wealth at large, but particularly abundance of silver, gold, and jewels, which are not perishable, nor so mutable as other Commodities, but are wealth at all times, and in all places; whereas abundance of wine, corn, fowls, flesh, etc., are riches but hic et nunc,(11) so as the raising of such commodities, and the following of such trade, which does store the country with gold and silver, is profitable before others" ([W. Petty, Several Essays in Political Arithmetick, London, 1699, pp. 178-79] p. 3). "Suppose that money by way of tax be taken from one who spends the same in superfluous eating and drinking and delivered to another who employs the same in improving of land, in fishing, in working of mines, in manufacture or in the purchase of clothes; then the Commonwealth has an advantage, because even clothes do not altogether perish as soon as meats and drinks. But if the same be spent in furniture of houses, the advantage is yet a little more; if in building of houses, yet more; if in improving of lands, working of mines, fishing, yet more; but most of all, in bringing gold and silver into the country, because those things are not only not perishable, but are esteemed for wealth at all times, and everywhere" ([ibid., pp. 195-96] p. 5).
Thus an author of the 17th century. One can see how the conception of gold and silver as the material representative and general form of wealth supplied the real stimulus to their accumulation. The cult of money has its corresponding asceticism, its renunciation, its self-sacrifice — thrift and frugality, contempt for the worldly, temporary and transient pleasures; the pursuit of eternal treasure. Hence the connection of English Puritanism or also Dutch Protestantism with money-making. A writer at the beginning of the 17th century (Misselden) expressed the matter quite ingenuously in this way:
"The natural matter of commerce is merchandise, the artificial is money. Money, though it be in nature and time after merchandise, yet forasmuch as it is now in use, become the chief." He compares this to the two [grandjsons of the old Jacob, who laid his right hand upon the younger and his left hand upon the older(12)
(JE. Misseiden, Free Trade. Or the Meanes to Make Trade Florish, p. 7] p. 24).
"We consume among us a great abundance of the wines of Spain, of France, of the Rhine, of the Levant, and of the Isles; the raisins of Spain, the corinths of the Levant, the cambrics of Hannault(13) and the Netherlands, the silks of Italy, the sugars and tobacco of the West Indies, the spices of the East Indies; all which are of no necessity unto us and yet are bought with ready money... If it [a commonwealth] vented fewer of the foreign [commodities], and more of the native, the residue must needs return in gold and silver, as treasure" (I.e. [pp. 12, 13]).
The modern economists naturally make fun of such remarks in the general section of their treatises. But if we consider the anxiety expressed in the theory of money in particular, and the feverish anxiety with which the inflow and outflow of gold and silver are watched over in practice in times of crises, we see that to regard money in the determination in which the adherents of the monetary and mercantile system conceived of it with naive one-sidedness is still quite justified, not merely in thought but as a real economic category.
[11-6] This contrast between the actual needs of production and the supremacy of money is most strikingly depicted by Boisguillebert (see the striking passages excerpted in my Notebook[67]).
(2) Apart from the perishability of other commodities, their accumulation differs in two essential respects from that of gold and silver, which are here identical with money. For one, the hoarding up of other commodities does not possess the character of a hoarding up of wealth in general, but of a particular wealth, and is therefore itself a particular act of production, where simple accumulation is not sufficient. Special appliances, etc., are required for the storage of grain; the accumulation of sheep does not automatically produce a herdsman; of slaves or land requires master-servant relationships, etc. All this, therefore, requires actions and certain conditions different from simple accumulation, from the augmentation as such of wealth. Secondly, if I now wish to realise the stored-up goods as general wealth, to appropriate to myself wealth in all its particular forms, I must carry on trade with the particular commodities that I have accumulated, I must become a corn dealer, cattle dealer, etc. Money as the general representative of wealth relieves me of this.
The ACCUMULATION of gold and silver, of money, is the first historical appearance of the accumulation of capital and the first great means for this. But as such it is not the accumulation of capital. For that, the re-entry of the accumulated money into circulation itself would have to be posited as a regular feature and means of accumulation.
Money in its final perfected determination now appears in all respects as a contradiction which resolves itself, which drives itself to its own resolution. As the general form of wealth, it is confronted by the whole world of real riches. It is their pure abstraction— hence comprehended as such, it is mere imagination. Where wealth appears to exist as such in a quite material, tangible form, it has its existence merely in my mind, is a sheer figment of the imagination. Midas. On the other hand, as the material representative of general wealth, money is realised only when it is thrown back into circulation and vanishes in procuring the individual particular forms of wealth. It remains in circulation as the means of circulation; but it is lost to the accumulating individual, and this disappearance is the only possible way in which it can be secured as wealth. The dissolution of the stored-up wealth into individual enjoyments is its realisation. It can now be amassed once more by other individuals, but then the same process commences anew. I can really posit its being for myself only by giving it up as mere being for others. If I want to hold on to it, it evaporates in my hand into a mere phantom of real wealth.
Furthermore, the idea of the augmentation of money by means of its accumulation, the idea that its own quantity is the measure of its value, again proves a delusion. If the other riches are not accumulated it loses its value in the measure in which it is accumulated. What appears as its augmentation is in fact its diminution. Its independence is only a semblance; its independence of circulation exists only in relation to circulation, as dependence on it.
It pretends to be the general commodity, but because of its natural particularity it is again a particular commodity, whose value both depends on demand and supply and changes with its specific production costs. And since it is itself incarnated in gold and silver, it becomes one-sided in any actual form; so that when the one appears as money the other appears as particular commodity, and vice versa, and thus each appears in both determinations.
As absolutely secure wealth quite independent of my individuality, it is simultaneously quite external to me; it is absolutely insecure wealth, which any accidental event can separate from me.
The same is true of the quite contradictory determination of money as measure, as means of circulation, and as money as such. Finally, in the last determination it contradicts itself in yet another way, because it is supposed to represent value as such; but in fact it represents only an identical quantity of variable value. It therefore transcends itself as perfected exchange value.
As mere measure, money is already negated in itself as means of circulation; as means of circulation and measure it is negated in itself as money. Its negation in the last determination is thus at the same time its negation in the other two. Negated as mere general form of wealth, it must therefore be realised in the particular substances of real wealth; but in actually proving itself as the material representative of the totality of wealth, it must at the same time preserve itself as the general form. Its entry into circulation must itself be an element of its staying with itself, and its staying with itself must be an entry into circulation. That is to say, as realised exchange value it must also be posited as process in which exchange value is realised. It is at the same time the negation of itself as a purely objective form, a form of wealth which is external and fortuitous for the individuals. It must appear, rather, as the production of wealth, and this as the result of the relations of individuals to one another in production.
In other words, exchange value is now determined no longer as a simple object, for which circulation is only an external movement, or which exists individually in a particular material, but as a process, as its self-relation by means of the process of circulation. On the other hand, circulation itself is no longer merely the simple process of the exchange of commodities for money and of money for commodities, no longer the mere mediating movement that takes place in order to realise the prices of the different commodities, to equate them as exchange values for one another, where both appear external to circulation: the presumed exchange value, the final withdrawal of the commodity into consumption, and hence the annihilation of exchange value on the one hand; and on the other, the withdrawal of money, which makes it independent of its substance, and which is again another form of its annihilation.
Exchange value itself, and now no longer [II-7] exchange value in general but measured exchange value, must, as a presupposition, appear as posited by circulation and, as posited by it, preposited to it. The process of circulation must appear also as the process of the production of exchange values. It is thus, on the one hand, the return of exchange value into labour, and, on the other hand, of money into exchange value; which, however, is now posited in a more profound determination. In circulation, the definite price is assumed, and it is only formally posited by circulation as money. The definiteness of exchange value itself, or the measure of price, must now itself appear as brought about by circulation. Posited in this way, exchange value is capital, and circulation is simultaneously posited as an act of production.
Omission: In circulation, as it appears as circulation of money, the coincidence in time of both sides of the exchange is always assumed. But a time gap can occur in between the availability of the commodities to be exchanged. It can be the nature of the reciprocal services rendered that one service is performed today but the reciprocal service can be performed only a year later, etc.
"In the majority of contracts," says Senior, "only one of the contracting parties has the thing at its disposal and loans it; and if exchange is to take place, one must transfer it at once under the condition of receiving the equivalent only at a later time. Since the value of all things varies in a given period of time, one takes as means of payment the thing whose value varies least, which over the longest period maintains a given average capacity to purchase things. So money becomes the expression or representative of value" [N. W. Senior, Principes fondamentaux de l'économie politique, Paris, 1836, pp. 116, 117].
According to that, the latter determination of money is in no way connected with its earlier ones. But that is wrong. It is only when money is established as an independent representative of value, that contracts are no longer estimated in e.g. quantities of grain or in services to be performed. (The latter prevails e.g. in feudalism.) It is only a notion of Mr. Senior that money possesses a "long-term average capacity" to maintain its value. THE FACT is that it is made the general material of contracts {general commodity of contracts, says Bailey(14)) as general commodity, representative of general wealth (says Storch(15)), exchange value made independent. Money must already be highly developed in its first two determinations to appear generally in its third. Now, it turns out in fact that the value of money can vary even though its quantity remains uniformly the same; that altogether, as a definite quantity, money is subject to the variability of all values. Here its nature as a particular commodity asserts itself over its general determination. [Money] as measure is indiffereht to changes in its value, for "in a variable medium, two different relations to that medium can be expressed as well as in a constant".(16)
As means of circulation it is also indifferent to changes in its value, for its quantity as such is posited by the measure. But as money, as it appears in contracts, it is affected [by such changes], just as, in general, its contradictions come to the fore in this determination.
To be inserted in particular sections: (1) Money as coin. Coinage can be dealt with very summarily here. (2) An historical survey of the sources of supply of gold and silver. Their discoveries, etc. The history of their production. (3) Causes of VARIATIONS in the value of the precious metals and thus of metallic currency; effects of these changes on industry and the different classes. (4) Above all the QUANTITY of money in circulation in relation to the rise and fall of prices. (16th century; 19th century.) In this connection also to be examined how money is affected as a measure by increases in its QUANTITY, etc. (5) On circulation: velocity, necessary quantity, the effect of circulation; more, or less, developed circulation, etc. (6) The dissolving effect of money.
(This to be inserted.) (Include here the specifically economic investigations.)
(The specific gravity of gold and silver, its containing much weight in a relatively small volume, AS COMPARED WITH OTHER METALS, recurs in the world of value, where gold and silver contain great value (labour time) in a relatively small volume. The labour time realised in it, its exchange value, is the specific gravity of the commodity. This makes the precious metals especially suitable for use in circulation (since one can carry a considerable portion of value in one's pocket) and for accumulation, since a large value can be securely kept and stored up in a small space. Gold does [not] change while it is being accumulated, unlike iron, lead, etc. It remains what it is.)
"If Spain had never possessed the mines of Mexico and Peru, it would never have needed the corn of Poland" (Ravenstone [Thoughts on the Funding System, and Its Effects, London, 1824, p. 20]).
"Illi unum consilium habent et virtutem et potestatem suam bestiae tradunt. Et ne quis posset emere aut vendere, nisi qui habet characterem aut nomen bestiae, aut numerum nominis ejus" (Apocalypse. Vulgata).(17) "The correlative quantities of commodities that one gives up for one another, constitute the price of commodities" (Storch [Cours d'économie politique, Vol. I, p. 72]).
"Price is the degré de la valeur échangeable*" (I.e. [p. 73]).
As we have seen, in simple circulation as such (in exchange value in its movement), the action of individuals upon one another is in content only the reciprocal self-interested satisfaction of their needs; in its form, it is exchange, positing things as equal to each other (equivalents). Hence property, too, is still posited here only as the appropriation of the product of labour by labour, and of the product of someone else's labour by one's own labour, in so far as the product of one's own labour is bought by someone else's labour. Property in someone else's labour is acquired through the equivalent of one's own labour. This form of property — just like freedom and equality — is posited in this simple relationship. In the course of the further development of exchange value, this will be transformed, and ultimately it will appear that the private property in the product of one's own labour is identical with the separation of labour and property; as a result, one's labour will create someone else's property and property will command someone else's labour.
[III. CHAPTER ON CAPITAL[68]]
Endnotes
[57] The planned chapter on exchange value was not written, as Marx started from Chapter II, dealing with money. He jotted down the beginning of the chapter on value at the end of his seventh (last) notebook of the manuscript of 1857-58 (see present edition, Vol. 29). Soon after, he decided that Chapter I should deal with the commodity, not with value. However, he realised that idea not in this manuscript, but in A Contribution to the Critique of Political Economy, Part One, Chapter One of which is entitled "The Commodity".—138
[2] This refers to Chapter XIV in the second edition of Bastiat's book Harmonies économiques (there are 25 chapters in that edition). Since this section of the draft "Bastiat and Carey" begins on page 5 of the manuscript, while half of page 4 was left blank, it may be assumed that Marx originally intended to discuss Bastiat's book in greater detail, giving, in particular, an account of the preceding 13 chapters.—11
[4] Marx means the philosophical and historical constructions in Proudhon's book Système des contradictions économiques, ou Philosophie de la misère (Paris, 1846). In 1847 Marx attacked them in The Poverty of Philosophy. Answer to the "Philosophy of Poverty" by M. Proudhon (see present edition, Vol. 6, pp. 105-212, particularly pp. 111-15 and 157-60).—13
[8] Contrat social—in Rousseau's theory, the voluntary agreement entered into by primitive people — originally living in "the state of nature"—which led to the formation of the political state. The theory was set forth in Rousseau's Du Contrat social; ou Principes du droit politique, London, 1782.—17
[38] In speaking about the Romantic embellishment of the individual's position in pre-capitalist society in contrast to capitalism. Marx is alluding to Adam Müller's Die Elemente der Staatskunst (Part II, Berlin, 1809. pp. 72-217), and to works by Thomas Carlyle, including his pamphlet Chartism (London, 1840, pp. 49-80).—
[60] Page 11 of Marx's Brussels notebook of excerpts (1845).—150
[62] Nexus rerum—"the link between things". In his excerpt notebook of 1851 entitled "The Completed System of Money Relations" Marx describes money (p. 41) as the "nexus rerum et hominum" (the link between things and people). He refers this quotation to p. 34. Unfortunately, it has been impossible to establish what work he meant. In calling money the "nexus rerum et hominum", Marx means the state of society which resulted from the disintegration of all the formerly dominant social links, patriarchal, feudal, family, religious, all of which were superseded by the rule of "cash".—155
[42] This refers to the discovery of rich gold fields in California in 1848 and Australia in 1851. As early as January 1850, eighteen months after the Californian discovery, Marx and Engels pointed to its vast importance for the commercial and industrial development of Europe, as well as of America and Asia — in particular, as stimulating the colonisation of new territories (see present edition, Vol. 10, pp. 502-06). The Californian and Australian discoveries spurred industrial and financial activity in the capitalist countries and to a certain degree contributed to the defeat of the European revolutions of 1848 and 1849.—106, 157
[63] Marx wrote this chapter in late 1857, when the capitalist economy, in particular, the financial system, was beginning to experience the effects of the first world economic crisis (1857-58), which had started in the USA and spread to all large European countries.—159
[64] Here and below Marx means the "arrangement" of the material of his study first outlined at the end of section 3 of his Introduction (see this volume, p. 45).—160
[65] This passage, attributed by Marx to Malthus, is actually by the editor of the second posthumous edition of Malthus' book (1836), who tried to give a more precise formulation of Malthus' ideas.—160, 232
[66] The pages in Petty's and, further on, Misselden's book are given according to Marx's Manchester notebook of excerpts (July 1845).—164
[67] Marx is referring to a notebook he filled in Brussels in the summer of 1845 with excerpts (on which he comments) from Boisguillebert's works, as published by E. Daire in a collection entitled Economistes financiers du XVIIIe siècle (Paris, 1843).—165
[68] The "Chapter on Capital" forms the main content of the manuscript Outlines of the Critique of Political Economy (1857-58). It takes up the greater part of Notebook II, the whole of notebooks III to VI and 64 pages of Notebook VII. In Notebook II, it is entitled "The Chapter on Money as Capital", but in the subsequent notebooks it figures under the heading "Chapter on Capital". On earlier publications of this chapter see Note 22.—171
[1] The unfinished draft manuscript "Bastiat and Carey", the first of Marx's Economic Manuscripts of 1857-58, takes up the first seven pages in one of the seven notebooks containing the main manuscript of that cycle, the Outlines of the Critique of Political Economy (Rough Draft). However, the date, "July 1857", which Marx put on the cover of that notebook, shows that "Bastiat and Carey" was written somewhat earlier than the Outlines. Pages 1, 2, 3 and the upper half of page 4 contain the "Avantpropos" (Introductory Notes) to "Bastiat and Carey", the lower half of page 4 is blank, and pages 5-7 are taken up by a passage entitled "XIV. De salaires". From page 8 onwards, there follows the continuation of the text contained in Notebook II of the main manuscript (see page 219 of this volume). Marx marked this continuation "Notebook III" and dated it "November 29 and 30, and December 1857". Since in the manuscript the draft bears the same subtitle as Bastiat's book, it may be assumed that Marx originally wanted to write an extensive review, but later decided that the book did not deserve detailed discussion, and therefore gave up his original intention. The draft goes beyond the bounds of an ordinary review. In the "Avantpropos", Marx sums up the bourgeois political economy of his time and strictly delimits the era of classical political economy as beginning in the late 17th century, with the works of Petty and Boisguillebert, and ending in the first third of the 19th century, with the writings of Ricardo and Sismondi. He shows that the bourgeois economists of the subsequent period were either epigones of the classics or vulgar critics of them. The works of the Frenchman Bastiat and the American Carey, directed above all against Ricardo, were examples of that kind of criticism. The title "Bastiat and Carey" occurs in Marx's "References to My Own Notebooks", written in the summer of 1861 (see present edition, Vol. 29). This shows that Marx himself regarded the draft as part of his Economic Manuscripts of 1857-58. He quotes from Bastiat partly in French and partly in German translation. In this volume, all quotations are in English; only foreign-language phrases in Marx's own text are given in the language of the original. The draft was first published in the journal Die Neue Zeit, Vol. 2, No. 27, Stuttgart, 1903-1904. In English, it first appeared, under the title "Critique of Bastiat and Carey", in Marx's Grundrisse by David McLellan, Macmillan Press Ltd., London, 1971, pp. 47-58 and in: Karl Marx, Grundrisse. Foundations of the Critique of Political Economy (Rough Draft). Translated with a Foreword by Martin Nicolaus. Penguin Books in association with New Left Review. London, 1973, pp. 883-93.-5
[3] According to Bastiat, "the workers' pension fund" was to be made up of contributions by the workers themselves, for thus alone the necessary degree of "stability" could be ensured (Fr. Bastiat, Harmonies économiques, 2nd edition, Paris, 1851, p. 395).—11